What Is the Maximum Extractable Value (MEV) Associated with Oracle Updates?
MEV in oracle updates refers to the profit that miners or validators can extract by reordering, censoring, or inserting their own transactions around an oracle update. For stablecoins, MEV is highly profitable in liquidations: an actor sees an impending update that triggers a liquidation and front-runs the transaction to claim the liquidation bonus.
Glossar
Maximum Extractable Value
Extraction ⎊ This concept quantifies the maximum value a block producer, such as a miner or validator, can extract from transactions within a single block beyond the standard block reward and gas fees.
Oracle Updates
Attestation ⎊ The term "Oracle Updates" within cryptocurrency, options, and derivatives contexts refers to the periodic dissemination of revised or corrected data feeds from external sources ⎊ oracles ⎊ that underpin smart contracts and pricing models.
Mev
Extraction ⎊ Maximal Extractable Value, or MEV, refers to the profit that can be extracted by block producers through their ability to reorder, insert, or censor transactions within a block.